We plan to concentrate on the Rio this financial year, while more products are in the pipeline

Premier Limited, erstwhile Premier Automobiles Ltd and better known by its ubiquitous product Premier Padmini, has made a re-entry into the passenger vehicle market. This time it is with a Chinese manufacturer called Zotye. Fes Shweta Bhanot caught up with Maitreya Doshi, chairman & managing director, Premier ltd, at the launch of Rio, the first product in association with Zotye at a starting price of Rs 5.25 lakh (ex-showroom Pune) in Mumbai, to find out what makes this legendary automaker re-visit the segment it tested with Chrysler and Fiat earlier. Excerpts:

Why did you re-enter the passenger vehicle market after bidding adieu nine years ago

We have re-entered the passenger vehicle because we saw opportunity in the market. The market is far more competitive today compared to what it was in the days of Padmini. From a handful players in those days, today we have many players operating at different volume levels. There is always a possibility to sell good products in the Indian market and everybody can find their space in it.

Chinese products are perceived to be low on quality. How do you plan to change this given your association with the Zotye Group

That was the mindset against the Japanese in the eighties and the Koreas in the nineties. You have seen how they have been dismissed. Let me tell this (perception about Chinese vehicles being low on quality) is set to change. The Chinese automobile industry is on its way to be world class. The industry produces over 10 million vehicles and a number of global original equipment manufacturers have expressed interest and sourcing components/kits from China. This would have not happened if Chinese quality was dubious or questionable. As far as our association with Zotye goes, the Rio, a compact sports utility vehicle, has gone through rigorous technical and road test in India, and passed all of them.

Can you elaborate on the exact nature of your tie up with the Zotye Group

We have a component supply agreement with Zotye for Rio and other products of the latter. It is a long-term tie up and we will continue to work together till there is business and the cars are selling.

As per the agreement, Zotye will give us upgrades and new variants. To start with, the Rio, based on Daihatsu model, will be shipped in from China as completely knocked down kits and will be assembled at our plant in Pune which has an assembly capacity of 15,000 units per annum. Initially, we will plan to produce 500 units of Rio per month till March 2010. Rio is powered by Premiers 1,489-cc turbo diesel engine based on Peugeot technology. It will have 20-25% localisation to start with including the engine.

Zotye is a new entrant in the Chinese market and has a plant in Shanghai with an annual capacity of 1 lakh units. The company is selling this vehicle successfully in China.

How many more products are expected from the company

We plan to concentrate on this product for this financial year. But there will be more products coming in the times to come.

How strong is your dealer network currently

Currently, we have 30 dealers another 45 will be added by January 2010. By April 2010, we are looking at a figure of 100 dealerships across India.